You’ve probably heard good news that banks are holding up to the stress tests, and if you have not, I am fairly certain that it came to you with little surprise. As will the other good news that despite their passing the stress test and despite all the money they have already received,
The bad news is that many of the largest American lenders, despite all those bailouts, probably need to be bailed out again, either by private investors or, more likely, the federal government. After receiving many millions, and in some cases, many billions of taxpayer dollars, banks still need more capital, these officials say.
--See here
They passed the stress test but will need billions more?
That the banks will require more of our money should come with little surprise if you have been living anywhere outside a cave for the past year, but if you have, kindly take a glance at their stock performance over the past year. Friend soros did us the favor of posting a list of the banks that will or already have passed Geithner’s stress test. Just google any for their stock performance. Citigroup JP Morgan, Wells Fargo, BoFA, you name it --
Not pretty.
How, then, could these banks pass the stress test? I have come across five basic scenarios that attempt to explain Team Obama's approach towards the banking crises:
- Null Hypothesis -- Team Obama is incompetent.
Straight forward enough
- Socialism on the March
Right wing hysteria. Doesn’t make much sense, but there you go. They are, after all, Republicans.
- The Puppet Masters
Our politicians are marionettes controlled by the Puppet Masters of corporate America. Democrats and Team Obama are dancing to their tune; TARP etc is a huge bailout of at our expense to cover their perfidy. The corporatist elite is robbing We the People.
or
non-dogmatic but Leftist nonetheless variation: Team Obama is compromised.
- Politics is an Extension of Warfare by other Means
Obama would, if he could, take on the banks. But he can't. The banks and their allies have their hooks too deeply imbedded into the Republicans and middle of the road Dems, so if Team Obama tried to take on the banks, the corporate interests would put the kibosh on all of Team Obamas program. Open warfare would ensue. Team Obama has calculated to play ball with the financial elite in order to accomplish other goals.
- Doom and Doom
There is the possibility that it really is that bad., that the financial system wrecked. I mean toast. It is so bad if an honest appraisal of how little value the various 'financial instruments' that imploded were to come out, our whole financial system would collapse.
Collapse as in hyper-inflation, 30% unemployment, suspension of Medicare, radical reduction in world trade, general war (thanks Thirstygator), things like that.
If such is the case, and I think it very well may be, Team Obama and Congress, and all Americans, and Europe, and Japan, and China, must pretend otherwise.
We ust make-believe that Yes We Can. Yes We Can go deeply - and I mean deeply -- into debt, prop up the failed financial system for years, and emerge without an economic collapse and its consequent wars.
Because the costs are too great to do otherwise.